Federal treasurer Jim Chalmers must ask the new Reserve Bank governor to accept an employment target the government has determined as the embodiment of the fine ambitions expressed in its white paper.
My trouble is I’m too nice. I’m too reluctant to tell people when I think they’re not trying hard enough. If I had time over again, I’d be tougher on nice young Treasurer Jim Chalmers and his white paper on employment.
Essentially, his argument for setting a target is that “what gets measured gets done”. And he’s dead right. This is not about economic theory, it’s about the practicalities of not just having ambitions, but making sure you have your best shot at achieving them. Last week, one of the nation’s leading labour market economists, Professor Jeff Borland of Melbourne University,. He doesn’t agree that the white paper was the right place for the government to nominate a specific numerical target.
So Borland accepts the government’s argument that, rather than relying solely on estimates of the NAIRU, “policymakers need a broad suite of measures to gauge the extent of current underutilisation ” and whether the labour market is close to the current maximum sustainable level of employment. He quotes what the white paper says on the matter. The objective is to “keep employment as close as possible to the current maximum sustainable level of employment that is consistent with low and stable inflation”.